(Adds Chinese trading sources, detail)
BEIJING/CHICAGO, Dec 17 (Reuters) - Chinese authorities have informed some agriculture industry officials the government has approved U.S. imports of a type of genetically modified corn developed by Syngenta AG, according to reports from Agri-Pulse and Bloomberg.
However, three sources at large Chinese importers told Reuters they had not received notice about an impending approval, instead suggesting a sudden big order of U.S. distillers grains, a corn by product, had fuelled expectations of a breakthrough.
The sources said that even though China’s bio-safety committee had cleared the strain from a food safety standpoint, the agriculture ministry needed to give its stamp of approval.
“The final decision will probably come in January or February next year,” said one of the trading sources at a state-owned trading firm.
China’s Agriculture Ministry declined to comment and a Syngenta spokesman said in an email the firm would make an announcement on the import approval of Agrisure Viptera corn, known as MIR 162, when it receives official documentation.
Syngenta said on Friday it was expecting China to clear imports soon.
The timing of Beijing’s approval of the MIR 162 corn strain is sensitive for industry participants as Beijing has rejected more than 1.2 million tonnes of U.S. corn in the past year due to commingling of the unapproved variety in shipments.
Global grain handlers Cargill Inc and Archer Daniels Midland Co, along with dozens of U.S. farmers, have sued Syngenta for damages over rejections. They claim the seed company misled the farm industry about the timeline for approval by China, a major importer.
The issue has also created turmoil in the U.S. distillers’ grain (DDGS) market, as import restrictions of the product in July led Chinese orders to grind to halt.
However, industry sources said unexpected import orders of DDGS from Chinese buyers was a sign that an approval was imminent.
Chinese firms last week bought as much as 900,000 tonnes of DDGS from the United States, the China National Grain and Oils Information Center (CNGOIC), a state think-tank, said.
Industry sources said a majority of the cargoes were purchased by state-owned COFCO, which could have been tipped off about an imminent approval of MIR 162 corn.
COFCO traders declined to comment.
COFCO booked the cargoes a week earlier at about $250 per tonne before prices jumped to $320 per tonne, including freight and cost, said another source with a big buyer.
Expectations of an imminent approval of MIR 162 helped lift U.S. corn futures to five-month highs on Monday. Front-month March corn was down 0.12 percent to trade at $4.05-1/2 a bushel. (UPDATE PRICES)
But traders and analysts cautioned the market may be being too optimistic about Chinese demand, as high corn stocks held by the state reserve would likely curb the country’s import appetite.
“Even if authorities give in and clear the strain, there are other strains of GMO corn grown in the U.S. which have not been approved for import and could still be used to restrict shipments,” said the first trade source.
Another Syngenta genetically modified variety known as Agrisure Duracade, which U.S. farmers harvested for the first time this autumn, has not been approved for import in China.
Traders China was also unlikely to issue more import quotas outside the current low-tariff quotas for corn, set at 7.2 million tonnes, of which 40 percent will go to private companies. (Reporting by Tom Polansek and Mark Weinraub in Chicago and Niu Shuping in Beijing; Editing by Chizu Nomiyama, Matthew Lewis and Ed Davies)